The stadium project includes the demolition and replacement of the 40-year-old West Hall of the Los Angeles Convention Center. AEG hopes to have the project adjacent to L.A. Live and Staples Center completed by the start of the 2016 football season.

Rumors have repeatedly seen the Chargers being the team that will play there.

"This is a significant project for the future of our city, and it will bring football back to Los Angeles,'' said Jan Perry, who chairs a council committee charged with vetting the stadium proposal. "But the most important thing is it will create jobs.''

The agreement — which was approved on a 12-0 vote — "protects the general fund, leverages private investment to modernize our convention center, and guarantees that the event center is built without public funds,'' added Perry, a 2013 mayoral candidate.

Dozens of labor and business leaders packed the chamber and gave public testimony asking the council to approve the agreement.

The vote clears the way for AEG to begin arranging financing to pay for the stadium and to conclude an ongoing environmental impact report, which the developer hopes to have approved by May 2012. It also allows AEG to advance negotiations with the NFL to bring a football team or two to Los Angeles. An announcement is unlikely until after the Super Bowl in early 2012.

The approval marks a shift from a conversation about how the project will be funded to a debate over the finer points of the proposal, which could mean more or less cost to taxpayers. Those include how the city will mitigate traffic and whether or not AEG will share advertising revenue from an estimated 50,000 square feet of new billboard space.

Councilman Mitchell Englander also said there has yet to be any discussion of public safety personnel costs that would be required on football game days.

"We certainly don't want to see another Bryan Stow incident like we did at Dodger Stadium,'' he said.

Under the memorandum of understanding, AEG would pay for the football stadium and two new parking structures. The city would issue $275 million in tax-exempt bonds to pay for the convention center, which will be built by AEG and designed by Populous, an international design firm.

The bonds would be split between $80 million that would be paid directly by AEG and backed by L.A. Live and Staples Center, which AEG owns. The city could foreclose on the properties if AEG was unable to pay the bonds.

The remaining $195 million in bonds would be paid from the city's general fund. The MOU is structured to use about half of new revenues generated by the project to repay the bond. Those include rent to use the city's land under the stadium, property taxes paid by AEG, parking taxes and a one-time construction tax.

City Administrative Officer Miguel Santana, who helped negotiate the agreement, has called the revenue sources consistent and reliable.

Any additional revenue would go back into the city's general fund, which pays for basic city services like police, libraries and pothole repairs. A consultant chosen by the city and paid for by AEG, Conventions Sports & Leisure, predicted the project will generate about $210 million in new revenue for the city's general fund over 30 years.

The MOU also requires AEG to build the new convention hall and parking structures before it begins construction of the new football stadium. The developer would also have to pay for any revenue lost by a decline or interruption of convention business because of the project.

The plan would create about 6,320 permanent jobs and 14,000 temporary construction jobs over three years, Perry said.

CSL studied the economic impacts of the proposal and predicted that more than half of the jobs would be in the service industry, including bars and restaurants. Another 385 advertising and 259 transit and ground transportation jobs would be permanent.

Perry said new construction would be covered by a project labor agreement, which will ensure "we are putting local people back to work.''

She added that a study of off-site job creation, which could include hotel workers and restaurant employees, has not yet been conducted.

The general manager of the Los Angeles Convention Center, Pouria Abbassi, has said he anticipates the project will bring new conventions, but convention center business is hamstrung by a lack of hotel rooms downtown.

The city needs at least 5,000 hotel rooms within one-half mile of the convention center to make it competitive with top convention centers in the country, but there are only about 1,700 rooms within that range, according to city officials.

"The skeptic is no longer a skeptic,'' said Councilman Bill Rosendahl, who had been the most reserved in his support of the project.

Rosendahl said he still wants to hear more discussion of possible revenue sharing from a new television contract once a football team arrives.

"This is not the end ... perhaps it is the end of the beginning,'' said Council President Garcetti, who asked about the city's ability to negotiate revenue sharing if AEG makes more money off the stadium than predicted. CSL estimated that AEG would have a low 6.7 percent rate of return on its investment.

"If we have reason to believe that they're profiting on public land unnecessarily, then certainly we're going to come back to you,'' said Chief Legislative Analyst Gerry Miller, who has been the city's lead negotiator in talks with AEG.